U.S. Workers Delaying Retirement: Who and Why and Implications for Businesses

Abstract

One of the main trends in the labor market in recent years is the aging of the workforce, which partly results from older workers delaying retirement. Using the Current Population Survey from the Bureau of Labor Statistics, we find that the trend of delaying retirement began as early as the mid-1990s, accelerated since the beginning of the latest recession, and has continued into the first four months of 2011. We also find that the development of this trend varied significantly across socioeconomic groups, industries, and occupations. We then use The Conference Board Consumer Confidence Survey to measure the impact of home prices and labor market conditions on retirement decisions, and find that workers in households that experienced labor loss/compensation cuts and significant declines in home prices were more likely to plan to delay retirement. These results also indicate that workers from states that suffered from large declines in home prices and high unemployment are more likely to delay retirement. We conclude by discussing potential economic and business implications.